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SAUDI ARABIA
“Even tyre makers are now focussing on retreading as rubber and tyre prices continue to maintain an upward trend and retreading is a viable option to get the maximum out of the tyre,” thinks Khalifa. Al Rashed invested about US$ 8 million in setting up the retreading unit which represents the maiden entry of Goodyear in the whole Middle East. Saudi Arabia is about a 1.6 to 1.8 million new tyre market annually according to independent sources. “Previously, merely 140,000 tyres are retreaded annually by about 14 retreading units spreads over Saudi Arabia. Therefore, the penetration of retreading is still very much on the fringes. Interestingly, it is getting popular as the volume of retreading is registering a positive trend with every passing year,” Ahmed Khalifa explained.
Ahmed Khalifa, Country Sales Manager, Tyre & Rubber Products, Rashed Abdul Rahman Al-Rashed & Sons Co.
Al-Rashed is focussing on maintaining the high quality standards of Goodyear at its Al-Khobar based plant in Dammam. The Goodyear process involves inspection by shearography machine, buffing, skiving, repairing, cementing, filling, tread preparation, building, enveloping, curing, final inspection and tread etc. “Our strict quality control measures increase the rejection levels to up to 50 per cent. We also avoid retreading Chinese and older Korean tyres,” stated Ghiath Al Khatiti, Regional Manager, Al-Rashed.
The Saudi Arabian market has to cope with the challenges of long distances, overloading, high hot temperatures and fast driving coupled with bad drivers that all result in poor casing conditions. “We cannot find enough casings from the
market and the law does not permit us to import casings,” said Khatiti. Al- Rashed prioritizes retreading tyres from the global brands like Goodyear, Michelin, Bridgestone etc.
Al-Rashed also rued the entry of smaller players into the market, retreading at much below their prices. “This market is opening up to the global players like Goodyear, Michelin and Bandag but the smaller players are killing the concept in its infancy. They have not invested as much neither are they following the quality standards we aim for. This is harming the concept,” feels Khalifa. The company is planning to retread 5,000 – 6,000 tyres in the first year. “We have a capacity to retread 12,000 tyres and we are planning additional capacity utilisation in 2012,” Khalifa claimed. It has one 18 tyre autoclave.
Al-Rashed is open to the idea of opening more retreading plants in other parts of the country. “We are very much open to the idea but our current priority is to run the plant to the full capacity as soon as possible,” Khalifa said. The plant was opened in January 2011. It has also commenced OTR repair. When queried about foraying into OTR retreading, Khalifa replied, “For the time being it is no but probably yes in the future.” Al- Rashed also introduced a Tyre Management System (TMS) recently. ‘We have only one fleet owner as our TMS client,” he said. It has a special technical team for the TMS.
Al-Rashed has introduced ten patterns in the Saudi market and a few of its patterns have become very popular. On- and-off road , long haulage LHD – 2 for 315 drive axle tyres have been especially well accepted in the Saudi market. While some of the popular patterns are 1200 R24 – NT 386, 1200 R24 NTMS, 315/80 RL2.5, KHD11 315/80 etc. “We are also the first doing bead to bead retreading in Saudi Arabia,” added Khatiti.
It has also been learnt that Al-Rashed is planning to cater to the price-sensitive market soon. It plans to bring MRF tread into the Saudi market.
Sheikh Rashed Al-Rashed founded the group in 1950 and forayed into wide range of business activities ranging from consumer to industrial products, trading,
servicing, contracting and development. Over the years the group has become a leading export force to the GCC countries and the Middle East. In 1994, Goodyear developed a strategic alliance
with the Al-Rashed group as its sole agent in Saudi Arabia. Al-Rashed Goodyear has three regional offices in Dammam, Jeddah and Riyadh.
RTS Looking for Site for New Plant
The market penetration of retreading is still very low but the potential of retreading has been recognised by retreading companies as global brands are entering the biggest market in the Middle East. The mid level players are also tightening their belts and make plans for further expansion. Meanwhile, Riyadh based Ring Tread System (RTS) is planning to set up one more plant. “We are looking for a suitable site for the new plant. We are likely to decide upon the site for the new plant soon,” said Mohammed Kossai, Plant Manager, RTS. It plans to make the new plant operational by the middle of 2012. “We are also looking for machinery for the proposed plant, which is likely to produce 2,000 tyres per month,” Kossai stated.
Currently, the Riyadh based plant retreads around 2,000 tyres per month and the new plant is likely to be of the same size. When asked if any site had been identified for the new plant, Kossai said, “It would be at some other location and will not be in Riyadh.” The company previously was using the
Ringtread system but the product was too expensive for the nascent Saudi market. It has shifted to other tread rubber. “We also used Malaysian brands but we have now settled down to Vipal from Brazil and Midas from India,” Kossai added.
RTS claims to be doing fairly good business despite intense competition in the market. “The competition has become unfair in recent times as competitors are lowering both prices and quality.” Riyadh already has five retreading plants and that may be the reason that RTS is looking for a new place for the second retreading unit. It has six 4 tyre chambers. “We have imported the plant from Marangoni but prices forced us to shift to other treads,” he said.
Meanwhile, RTS is also planning to source a new shearography machine. “We are looking for a new machine to replace the old one,” he said. RTS is also buying old OTR casings and planning to ship them to other markets.